●FED
● ACCOMPANYING LETTER
■ The Fed predicts only two rate cuts in 2025.
■ Fed forecasts suggest a rate reduction of 50 basis points in 2025 and another 50 basis points in 2026.
▫️ The neutral rate forecast has been raised from 2.9% to 3.0%.
▫️ Economic activity continues to grow at a confident pace.
▫️ Labor market conditions have improved since the beginning of the year.
▫️ Unemployment has risen but remains low.
▫️ Inflation has approached the 2% target.
▫️ Risks related to the Fed's dual mandate (inflation/labor market) are balanced.
▫️ Economic prospects remain uncertain.
▫️ Further Fed monetary policy depends on macroeconomic data.
